In a medium bowl, combine the softened cream cheese and unsalted butter.
Using an electric mixer, beat the cream cheese and butter together on medium speed until smooth and creamy, about 2 minutes.
Gradually add the powdered sugar, mixing on low speed to avoid a sugar cloud, then increase to medium speed and beat until fully incorporated.
Add the vanilla extract and milk, then continue to beat the mixture until the icing is light and fluffy, about 2 more minutes.
If the icing is too thick, add a little more milk, one teaspoon at a time, until the desired consistency is reached.
Spread or pipe the icing onto cooled banana muffins before serving.