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 to the mixture, beating on low speed until fully incorporated.
Add the vanilla extract and milk, then increase the mixer speed to medium and beat until the icing is light and fluffy, about 2-3 minutes.
If the icing is too thick, add an additional teaspoon of milk and beat again until desired consistency is reached.
Spread or pipe the icing onto cooled banana muffins before serving.