In a large bowl, combine pudding mix, sweetened condensed milk, and water. Whisk until combined, transfer to the fridge, and let thicken for 20-30 minutes.
In the bowl of a stand mixer fitted with the whisk attachment, whip heavy cream on medium-high speed until stiff peaks form. Fold into the pudding mixture.
In another bowl, stir together dulce de leche and water until smooth. (This helps thin it out to more of a drizzling consistency.)
To assemble banana pudding (whether you’re using small cups or one large dish), start by adding a layer of pudding and top with sliced bananas. Cover with vanilla wafers (I crushed mine slightly) and drizzle with dulce de leche. Repeat layers with remaining pudding, bananas, vanilla wafers, and dulce de leche.
Optional toppings include additional whipped cream, crushed vanilla wafers, and dulce de leche.
Store loosely covered in the refrigerator for 4 to 6 hours. Dulce de Leche Banana Pudding is best served within one day of assembly.