In a large mixing bowl, whisk together the cold milk, vanilla extract, and instant vanilla pudding mixes until thickened.
Add the sweetened condensed milk and mix until smooth and fully combined.
In a separate bowl, beat the heavy whipping cream until stiff peaks form.
Fold about two-thirds of the whipped cream gently into the pudding mixture until light and fluffy.
Stir the powdered sugar into the remaining whipped cream, if using, and refrigerate until needed for the topping.
Arrange a layer of vanilla wafers in the bottom of a trifle dish or serving bowl.
Top with a layer of sliced bananas.
Spread a layer of the pudding mixture over the bananas.
Repeat the layers of vanilla wafers, bananas, and pudding until all the ingredients have been used, finishing with a layer of pudding.
Spread the reserved whipped cream evenly over the top.
Garnish with crushed vanilla wafers, banana slices, or extra whipped cream if desired.
Cover and refrigerate for at least 2 hours before serving to allow the flavors to blend.