In a medium bowl, whisk together the cold milk and instant vanilla pudding mix until smooth. Let it sit for about 5 minutes to thicken.

In a separate bowl, beat the softened cream cheese and powdered sugar together until creamy. Add the vanilla extract and mix until well combined.

Gently fold the whipped topping into the cream cheese mixture until fully incorporated.

In a 9x13 inch baking dish, layer half of the Nilla Wafers on the bottom.

Spread half of the pudding mixture over the Nilla Wafers, followed by half of the sliced bananas.

Repeat the layers with the remaining Nilla Wafers, pudding mixture, and bananas.

Top the final layer with the remaining whipped topping and garnish with crushed Nilla Wafers or additional banana slices if desired.

Cover the dish with plastic wrap and refrigerate for at least 4 hours, or overnight for best results.