In a large bowl, whisk together the sweetened condensed milk and cold water until smooth.
Add the pudding mix and whisk for 2 minutes until thickened. Place in the refrigerator for 5 minutes to set.
In another bowl, beat the softened cream cheese until smooth and creamy. Fold it into the pudding mixture until fully combined.
Gently fold in the whipped cream, being careful not to deflate it. The mixture should be fluffy and light.
Spread a thin layer of the pudding mixture in the bottom of a 9x13 dish.
Add a layer of vanilla wafers, followed by a layer of banana slices, then spread more pudding mixture on top.
Repeat the layers until all ingredients are used, finishing with pudding on top.
Garnish with crushed wafers, banana slices, or a swirl of whipped cream.
Cover and refrigerate for at least 4 hours, or overnight for best results.